TLDR
- CoreWeave secured a $14.2 billion deal with Meta to provide AI computing power through December 2031, with an option to extend through 2032.
- The agreement gives Meta access to Nvidia’s GB300 server racks containing 72 Blackwell AI GPUs each.
- CoreWeave shares jumped 12-14% following the announcement on Tuesday.
- The deal helps CoreWeave diversify away from Microsoft, which currently accounts for roughly 70% of its revenue.
- This follows CoreWeave’s recent $6.5 billion agreement with OpenAI announced last week.
CoreWeave announced Tuesday it has signed a $14.2 billion agreement with Meta to provide AI computing power through December 2031. The deal includes an option to extend through 2032 for additional cloud computing capacity.
Shares of CoreWeave jumped 12-14% following the news. The Nvidia-backed AI data center operator is now valued at $60 billion.
Under the agreement, Meta will gain access to Nvidia’s GB300 server racks. Each rack contains 72 of the chipmaker’s Blackwell AI GPUs.
CoreWeave CEO Michael Intrator told Bloomberg that Meta “loved our infrastructure in earlier contracts and came back for more.” The company is working to diversify its customer base away from Microsoft, which accounted for roughly 70% of revenue in its most recent quarter.
“This is clearly a step in the right direction for diversification,” Intrator said. The deal allows CoreWeave to fill data center capacity beyond its largest customer.
Reducing Customer Concentration Risk
The partnership comes just one week after CoreWeave signed a $6.5 billion deal with OpenAI. CoreWeave executives noted sky-high demand from clients during that announcement.
Hedgeye Risk Management analyst Felix Wang, who holds a short position on CoreWeave, called the deal “a positive surprise.” Tech analyst Kimberly Forrest from Bokeh Capital Partners said the partnership was “a good deal for both” firms.
Forrest noted that current demand for high-end AI chips appears “limitless.” The deal is part of a broader rush by Big Tech companies to add compute capacity in data centers.
Meta has been spending heavily on AI infrastructure. The company raised its 2025 capital expenditure guidance to between $66 billion and $72 billion in its most recent quarterly report.
The Instagram parent is building a 4 million square-foot data center in Louisiana. Meta has been investing tens of billions into data centers across the U.S.
Latest in Multi-Billion Dollar AI Deals
Other recent AI deals include Nvidia’s $100 billion OpenAI investment announced last week. OpenAI also reportedly signed a $300 billion contract with Oracle.
Citi analysts forecast that AI capital expenditures from 2025 through 2029 would hit $2.8 trillion. CoreWeave operates AI data centers in the U.S. and Europe.
The company offers access to Nvidia’s graphics processing units, which are highly sought after for training and running large AI models. Big Tech firms have been renting space in CoreWeave’s data centers to access its large supply of Nvidia chips.
This happens while they build their own sites. Some Wall Street analysts have raised concerns about CoreWeave’s mounting debt borrowed at high interest rates.
Others worry about the company’s deteriorating operating income outlook. Critics point to CoreWeave’s “risky” business model given its heavily concentrated customer base consists of its own competitors.
The fear is that once Big Tech firms finish building their own data centers and obtain sufficient Nvidia chips, they won’t need CoreWeave’s compute capacity. CoreWeave went public in March in a rocky IPO that tested the AI trade.
Shares are up roughly 260% for the year but remain below their high above $183 in June. The stock dropped at the start of September as insiders sold off shares.
AI technology developers are rushing to sign multi-billion-dollar deals to lock in infrastructure quickly. This has boosted valuations of backend service providers like CoreWeave.
The boom has raised questions about “circular” financing, as many AI tech firms invest in and sign supply deals with each other. Some analysts worry whether the surge in valuation represents a bubble.
